Britannia industries

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  • 1. SRM ASSIGNEMENT 2 August 15 2013 NEW HORIZON COLLEGE OF ENGINEERING MBA MARKETING
  • 2. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 1 HISTORY - BRITANNIA INDUSTRIES Established – 1892 - initial investment Rs 295 – Britannia Biscuit Company 1910 – Mechanized operations 1975 – Took over the distribution from Parry’s 1978 – Indian Shareholding crossed 60% 1979 – Rechristened Britannia Industries limited. 1983 - Revenues crossed 100 crores 1992 – Wadia group acquired stake and became an equal partner with Grope DANONE 1993 – Sales crossed 1, 00,000 tonnes of biscuits 1997 - New corporate identity -“Eat Healthy, Think Better “- enters Dairy market 2000 - Forbes Global Ranking - Britannia among top 300 small companies 2002 – JV with Fonterra - World’s second largest Dairy Company, Britannia New Zealand Foods Pvt Ltd. is born, Economic Times - BIL India’s 2nd Most Trusted Brand Forbes Global Ranking - Britannia among top 200 small companies 2004 – Volumes cross 3, 00,000 tonnes of biscuits 2005 – Rebirth of Tiger – “Swasth Khao Tan Man Jao “ Commissioningof new plant in Uttaranchal – ahead of schedule MANAGEMENT TEAM AT BRITANNIA BRITANNIA INDUSTRIES
  • 3. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 2 VISION To be one of the best biscuit and baked snack products in Europe. To produce innovative products for an ever changing markets. Healthy biscuits and snacks using finest ingredients. MISSION  “We believe in quality and service. We believe that you as a client, should be able to rely fully on the professional ability of your cleaning Contractor.  Your organization is as important to us as it is to you.  We believe that Britannia as you’re appointed Cleaning Contractor should take full ownership and responsibility for the Cleaning and Maintenance of your buildings, leaving you as a client free to concentrate your time fully on your core business where you actually generate your income.  We have made a promise to ourselves not to compromise and never put our name to poor standards, we never have or ever will. We are confident in our quality and reliability.  We want you to be confident in promoting your Companies professional Image to the world by choosing the services of Britannia Services Group we will ensure it is a clean one. Britannia Services Group is quality and service you can trust. That is our guarantee to you. COMPANY PROFILE Type Public-(BSE: 500825 NSE: BRITANNIA) Industry Food processing Founded 1892 Headquarters Kolkata, West Bengal/ Bangalore (Karnataka), India Number of locations 300 stores (2000)
  • 4. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 3 Area served India Key people Nusli Wadia, (Chairman) Vinita Bali, (MD) Products Bakery products, including biscuits, bread, cakes and rusk, and dairy products, including milk, butter, cheese, ghee and dahi Revenue 46.70 billion (US$790 million) (2011) Profit 1.34 billion (US$23 million) (2011)[ Parent Wadia Group Website www.britannia.co.in Britannia Industries Limited is an Indian company based in Bangalore that is famous for its Britannia and Tiger brands of biscuit, which are highly recognized throughout the country which was founded in the year 1982. Britannia is one of India‟s leading biscuit firms, with an estimated 38% market share. Major Activity: The Company's principal activity is the manufacture and sale of biscuits, bread, rusk, cakes and dairy products. Dairy products contribute close to 10
  • 5. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 4 per cent to Britannia's revenue. Britannia holds an equity stake in Dynamic Dairy and had outsourced the bulk of its dairy products from its associate. Its main competitors are Nestle India, and the National Dairy Development Board (NDDB), and Amul (GCMMF) Sector: Fast Moving Consumer Goods (FMCG) Listed On: Present Share Price as on 10th November 2010 : • BSE: 441.25 which increased by 0.05% to its previous day closing. • NSE: 441.70 which increased by 0.31% to its previous day closing. Countries: Exports • USA
  • 6. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 5 • UAE • Qatar • Bahrain • Ghana • Saudi Arabia • Kuwait • Singapore • Oman • Seychelles Britannia Industries Limited is an Indian food-products corporation based in Kolkata, India. It sells its Britannia and Tiger brands of biscuit throughout India. Britannia has an estimated 38% market share. The Company's principal activity is the manufacture and sale of biscuits, bread, rusk, cakes and dairy products. The company was established in 1892, with an investment of Rs.295. Initially, biscuits were manufactured in a small house in central Kolkata. Later, the enterprise was acquired by the Gupta brothers mainly Nalin Chandra Gupta, a renowned attorney, and operated under the name of "V.S. Brothers." In 1918, C.H. Holmes, an English businessman in Kolkata, was taken on as a partner and The Britannia Biscuit Company Limited (BBCo) was launched. The Mumbai factory was set up in 1924 and Peek Freans UK, acquired a controlling interest in BBCo. Biscuits were in big demand during World War II, which gave a boost to the company’s sales. The company name finally was changed to the current "Britannia Industries Limited" in 1979. In 1982 the American company Nabisco Brands, Inc. became a major foreign shareholder. Innovation is the key mantra In this highly competitive market Britannia survives because of its continuous product and marketing innovation. Its reposition into EAT HEALTHY AND THINK BETTER touched the emotional part of all Indians and enhanced its brand image and market cap. Its continuous innovation and its lower cost variety to reach the market depth like TIGER BISCUITS are notable innovative strategies by the company. Even if we take MILK BIKIS it changed its wrapper, font and size continuously to break monotony in the minds of customers. Financials Britannia Industries Ltd. (BIL), one of India’s leading food Companies, reported sales of Rs. 25,848 MM for the year ended 31st March 2008. This reflects a 17.5% growth over the previous year. Net Profit for the year at Rs. 191 crores grew by 77.6%. Operating margin improved by more than 300 basis points. For the last quarter of the year, the Company reported Net Sales of Rs. 6, 92 crores & Net Profit of Rs. 61 crores, up 15.6% & 53.6% respectively, over the corresponding quarter last year. The Board of Directors has recommended a dividend of Rs. 18 per share of Rs. 10 each. Total payout including Dividend Distribution Tax amounts to Rs. 50 crores for the year. In the food processing industry it ranks 2nd among the top 3 in net sales in India Rank Company Net Sales(03/07) 1 Nestle 3500 crores 2 Britannia 2200 crores 3 Glaxo smith 1300 crores Ratios
  • 7. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 6 Ratio Mar 2007 Mar 2006 Mar 2005 Mar 2004 Mar 2003 Operating margin (%) 5.85 11.72 11.58 11.21 11.35 Gross profit margin (%) 4.70 10.46 10.39 9.65 9.34 Net profit margin (%) 4.86 8.48 9.25 8.16 7.59 Current ratio 1.02 1.35 1.18 1.10 0.86 Operating Profit Margin Operating profit ratio=operating profit (EBIT)/sales The decrease in operating profit margin in 2007 can be because of increase in the cost of raw materials and commodities like wheat and sugar. The material cost has gone up significantly from the year 2006 to 2007. Gross Profit Margin Gross Profit Ratio=Gross Profit/Sales The decrease in Gross profit margin in 2007 can be because of increase in the cost of raw materials and commodities like wheat and sugar. The material cost has gone up significantly from the year 2006 to 2007. Net Profit Margin It is calculated as Net Profit Ratio=EAT/Net Sales The decrease in net profit margin in 2007 can be because of increase in the cost of raw materials and commodities like wheat and sugar. The material cost has gone up significantly from the year 2006 to 2007. Current Ratio It is defined as current assets divided by current liabilities. It is a measure of short term financial liquidity of the firm. Current Ratio= Current Assets/Current Liabilities Analysis A current ratio of 2:1 is always considered as optimum means that there is a 50 % safety margin in terms of assets to cover its current liabilities. However this doesn’t mean higher current ratio is good. It may signify higher unused cash, inventory which again may result in inventory carrying cost. A current ratio of around 1 seem to be numerically not attractive based on logics however for a company like Britannia with huge brand equity and market cap this doesn’t have significant negative impact from investors point of view or financial strength point of view. MARKET GROWTH RATE: FINANCIAL PERFORMANCE - BRITANNIA INDUSTRIES LTD.
  • 8. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 7 Kerala businessman Rajan Pillai secured control of the group in the late 1980s, becoming known in India as the 'Biscuit King'. In 1993, the Wadia Group acquired a stake in Associated Biscuits International (ABIL), and became an equal partner with GroupDANONE in Britannia Industries Limited. In what The Economic Times referred to as one of India's most dramatic corporate sagas, Pillai ceded control to Wadia and DANONE after a bitter boardroom struggle, then fled his Singapore base to India in 1995 after accusations of defrauding Britannia, and died the same year in Tihar JailThe company is growing at a steady rate, and is currently profitable. Between 1998 and 2001, the company's sales grew at a compound annual 0 500 1000 1500 2000 2500 1 NET PROFIT (IN MILLION RS) YEARS NET PROFIT - BRITANNIA INDUSTRIES LTD- 1995- 2006 1995- 96 1996- 97 1997- 98 1998- 99 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000 1 SALES(RsMillion) YEARS NET SALES - BRITANNIA INDUSTRIES LTD. - 1995 -2006 1995- 96 1996- 97 1997- 98 1998- 99 1999- 00 2000- 01 2001- 02
  • 9. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 8 rate of 16% against the market, and operating profits reached 18%. More recently, the company has been growing at 27% a year, compared to the industry's growth rate of 20%. At present, 90% of Britannia’s annual revenue of Rs.22 billion comes from biscuits. Britannia is one of India's 100 Most Trusted brands listed in The Brand Trust Report. The Wadias' Kalabakan Investments and Groupe DANONE had two equal joint venture companies, Wadia BSN and UK registered Associated Biscuits International Holdings Ltd., which together held a 51 per cent stake in Britannia. The ABIH tranche was acquired in 1992, while the controlling stake held by Wadia BSN was acquired in 1995. It was agreed that, in case of a deadlock between the partners, DANONE was obliged to buy the Wadia BSN stake at a "fair market value”. ABIH had a separate agreement signed in 1992 and was subject to British law. Wadia was to be DANONE’s partner in the food and dairy business, and product launches from Groupe DANONE’s were expected but never materialised despite the JV being in existence for over 11 years in India. Under the 1995 joint venture agreement, DANONE is prohibited from launching food brands within India without the consent of the Wadias. In addition, the partners agreed there would be the right of first refusal to buy out the remaining partner in the event of the other wishing to sell its holding. In May 2007, Nusli Wadia told the Ministry of Commerce and Industry that DANONE invested in a Bangalore-based bio nutrition company, Avesthagen in October 2006 in violation of the government's Press Note 1, 2005, which requires a foreign company to obtain the consent of its Indian joint venture partner before pursuing an independent business in a similar area, including joint ventures based purely on technical collaboration. DANONE argued that Press Note 1 did not apply to it as it did not have a formal technology transfer or trademark agreement with Avesthagen, and that its 25% holding in Britannia was indirect. Wadia also filed a case in the Bombay High Court for a breach of a non- competition clause in that connection. The court ordered DANONE not to alienate, encumber or sell shares of Avestagen. In September 2007, the Foreign Investment Promotion Board of India rejected DANONE’s claims that it did not need a non-compete waiver from the Wadias to enter into business in India alone. In June 2006, Wadia claimed DANONE had used the Tiger brand to launch biscuits in Bangalore. After a prolonged legal battle, DANONE agreed to sell its 25.48% stake in Britannia to Leila Lands, which is a Wadia group entity based in Mauritius, and quit this line of business. The deal was valued at $175–200 m. With this buy-out, Wadia holds a majority stake of 50.96%. MARKET SHARE:
  • 10. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 9 Listing Details - Britannia Industries Key Dates Year Ending Month Mar AGM Date (Month) Aug Book Closure Date (Month) Jul/Aug Listing Information Face Value Of Equity Shares 2 Market Lot Of Equity Shares 1 BSE Code 500825 NSE Code BRITANNIA BSE Group A Whether The Company Forms A Part Of The Following Indices - Sensex No Nifty No BSE-100 No BSE-200 Yes S&P CNX 500 Yes CNX Midcap Yes CNX FMCG No Listing On Listed On The Stock Exchange, Mumbai, National Stock Exchange of India Ltd.
  • 11. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 10 Source : Dion Global Solutions Limited The summary page of Britannia Industries Ltd. captures the information on its Live Stock Price and Volume, 52 Week High Low, Intraday and Historical Price Chart, Key Ratios, F&O Quotes, Competitors, Comparative Analysis, Buy Sell Recommendations, Company News and Announcements, Shareholding Pattern, Key Quarterly and Annual P&L A/c items, and Community Prediction. FUTURE PROSPECTS - BRITANNIA INDUSTRIES LTD.
  • 12. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 11 Draw from the product portfolio from GROUPE DANONE Enter into various new areas of food like snacks and health drinks Look at New distribution channels like malls Boost sales with aggressive brand building strategies Look out for both organic and inorganic growth Enter family size pack BUSINESS TYPE: Dairy products- Dairy products contribute close to 10 per cent to Britannia's revenue. Britannia trades and markets dairy products, and its dairy portfolio grew to 47% in 2000-01 and by 30% in 2001-02. Britannia holds an equity stake in Dynamix Dairy and outsources the bulk of its dairy products from its associate. Its main competitors are Nestlé India, the National Dairy Development Board (NDDB), and Amul (GCMMF). Joint venture with New Zealand Dairy On 27 October 2001, Britannia announced a joint venture with Fonterra Co-operative Group of New Zealand, an integrated dairy company from procurement of milk to making value-added products such as cheese and buttermilk. Britannia planned to source most of the products from New Zealand, which they would market in India. The joint venture will allow technology transfer to Britannia. Britannia and New Zealand Dairy each holding 49% of the JV, and the remaining 2 per cent held by a strategic investor. Britannia has also tentatively announced that its dairy business would be transferred and run by the joint venture. The authorities' approval to the joint venture obliged the company to start manufacturing facilities of its own. It would not be allowed to trade, except at the wholesale level, thus pitching it in competition with DANONE, which had recently established its own dairy business. Biscuits Britannia Little Hearts The company's factories have an annual capacity of 433,000 tonnes. The brand names of biscuits include VitaMarieGold, Tiger, Nutrichoice Junior, Good day, 50 50, Treat, Pure Magic, Milk Bikis, Good Morning, Bourbon, Thin Arrowroot, Nice, Little Hearts and many more. Tiger, the mass market brand, realised $150.75 million in sales including exports to countries including the U.S. and Australia, or 20% of Britannia revenues in 2006. In a separate dispute from the shareholder matters, the company alleged in 2006 that DANONE had violated its intellectual property rights in the Tiger brand by registering and using Tiger in several countries without its consent. Britannia claimed the company found out that DANONE had launched the Tiger brand in Indonesia in 1998, and later in Malaysia, Singapore, Pakistan and Egypt, when it attempted to register the Tiger trademark in some of these countries in 2004. Whilst it was initially reported in December 2006 that agreement had been
  • 13. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 12 reached, it was reported in September 2007 that a solution remained elusive. In the meantime since DANONE’s biscuit business has been taken over by Kraft, the Tiger brand of biscuits in Malaysia was renamed Kraft Tiger Biscuits in September 2008. Britannia initiated legal action against DANONE in Singapore in September 2007. The dispute was resolved in 2009 with Britannia securing rights to the Tiger brand worldwide, and DANONE paying Rs220 million to utilize the brand. SUPPLY CHAIN MANAGEMENT: Cookies-to-cheese major Britannia Industries is conducting an internal investigation at its supply chain and logistics department to probe alleged misuse of company powers in giving orders by unfairly favoring some suppliers at the cost of others. This comes within a few days of an alleged Rs. 870-crore fraud at the Indian arm of German sportswear giant Adidas AG‟s Reebok unit. The high-profile probe is being directly led by Vinita Bali, managing director, Britannia Industries, said informed sources. The investigation aims to find out the number of employees involved. “We have come across instances of certain practices and behavior, which are in violation of our code of business conduct, which clearly spells out the ethical standards of behavior from all Britannia employees at all times. These are being investigated thoroughly and appropriate action will be taken against those employees who have violated that code of business conduct, which every employee signs,” said the company spokesperson. While the sources said that Bali took swift action and fired 28 people after the scam surfaced, Britannia played down the entire incident, claiming employees were still under probe. “Ten people have been asked not to show up at work till the investigation is over,” said the company spokesperson. Britannia has strict and clear code of business conduct and code of conduct for prevention of insider trading by employees. The management was quick to take suitable action once the incident came to light, though it could not be verified since how long the activity was going on, said sources. The company refused to provide further clarifications. “The probe will be quick and action will be taken,” said the spokesperson. To innovatively market to the Secondary trade Channel  Britannia India’s No. 1 Biscuit Brand: Rated as Super Brand for 2 consecutive years  Tamil Nadu has over 22% contribution in Britannia’s Volume in India  Only Kind of Program in Foods Industry  Nearly 6 months of Management at Evolve  Over 1500 Secondary Trade Partners from Tamil Nadu  360 Degrees approach once again
  • 14. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 13  Encompasses  Purchase Reporting & Tracking  Planning to Dictate Product mix Models  Tele based Channel Support-Inbound and Outbound from Chennai Office Flows in Supply Chain Manufact urer Distribut or Retailer Custome r Material Funds Info
  • 15. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 14 Britannia Supply Chain a. Imported products Parle Factory Retailer Institutions Eg. Hospitals Distributor (Retailer) Distributor (Institutional) Customer Distribution Strategy
  • 16. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 15 b. Domestic products a. Imported products b. Domestic products a. Imported products b. Domestic products Crude Palm oil comes from Indonesia and Malaysia Shipped to Kandla Port Refining of Crude Oil Traders supply refined palm oil to Britannia
  • 17. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 16 Analysis of Supply chain  Model based on third party manufacturers ERP Software:  Consistent data sharing Increase in efficiency.  Reduction in operational overheads.  Better working capital management.  Increased control over inventory management.  Realistic production scheduling.
  • 18. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 17  Effective cost control system.  Optimal usage of capacity.  Timely purchasing and efficient vendor management.  Minimal effort in following regulatory norms because of a strong EXCISE system.  Make-to-stock  Pull driven  Balanced Score card  SRM: Annual procurement meet SWOT ANALYSIS Strength 1. Around 120 years in the industry 2.India’s most trusted brand with strong brand recall 3. Wide range of bakery products like biscuits, rusks, cakes and dairy products like milk, butter, cheese, etc. 4. Strong distribution network ensuring proper availability of the products even in the remotest of areas 5. Major share in biscuits industry 6. Marketing and advertising efficiency 7. Innovative products for health conscious people like oats and porridge, Nutri Choice biscuits for diabetes patients, Vita Marie Gold, etc. 8. Strong presence in rural markets 9. Products for all food and snacks segments
  • 19. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 18 Weakness 1. Lower market share in dairy segment 2.Heavy expenditure on advertising and marketing 3. Similar products produced by many companies means high brand switching Opportunity 1. Increase in purchasing power of people in India 2.Increase its share in the dairy industry 3.Product line extension 4. Expansion in other countries Threats 1. Lower price offering competitors 2.Local dairies and bakeries 3.Inflation can cause fall in sales and revenue 4. Rise in cost of raw materials MANAGERS ROLE: Vinita Bali, Managing Director, Britannia Industries, joined the company as Chief Executive Officer in January 2005. Since Vinita joined Britannia as CEO in 2005, the company almost doubled its turnover in just four years, growing at an annual rate of c23%, as compared to the previous three years‟ 10-11% growth. She has led Britannia‟s charge beyond its core biscuits business into categories such as dairy and bakery, and moved into international markets with Britannia‟s range of products. She received her Bachelor's Degree in Economics from LSR at the University of Delhi and her MBA at the Jamnalal Bajaj Institute of Management Studies at Bombay University. She pursued postgraduate studies in Business and Economics at Michigan State University on a scholarship from The Rotary Foundation, and was selected to work as a Graduate Intern at the United Nations headquarters in New York. She started her career with Voltas Ltd.-a Tata Group company focusing on consumer products, where she launched Rasna soft-drink concentrate. In 1980, Vinita joined Cadbury India. The Coca-Cola Company chose her as its worldwide Marketing Director in 1994 where she was responsible for the worldwide strategy for Coke. In 1997 she took over as Vice President of Marketing for Latin America, and in 1999 relocated to Chile as President of the Andean Division with sales in excess of US$1bn. In 2001, she was made a corporate officer of The Coca-Cola Company and appointed Vice President of Corporate Strategy reporting to the Chairman. After a nine-year association with Coke, Vinita joined her mentor at Coke, Sergio Zyman at the Zyman Group in July 2003 as a Managing Principal and Head of the Business Strategy practice in the company's Atlanta office. As a member of the company's Board of Managers, Vinita shared responsibility for developing and managing Zyman Group's consulting business. Britannia was started in 1892 in a nondescript house in Calcutta (now Kolkata) with an initial investment of Rs295. By 1910, with the advent of electricity, Britannia mechanized its operations, and in 1921, it became the first company east of the Suez Canal to use imported gas ovens. In 1975, the Britannia Biscuit Company took over the distribution of biscuits from Parry's who till then distributed Britannia biscuits in India. In the subsequent public issue of 1978, Indian shareholding crossed 60%, firmly establishing the Indianans of the firm. The following year, Britannia Biscuit Company was re-
  • 20. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 19 christened Britannia Industries Limited (BIL). Four years later in 1983, it crossed the Rs1bn revenue mark. The company's offerings are spread across the spectrum with products ranging from the healthy and economical Tiger biscuits to the more lifestyle-oriented Milkman Cheese. MARKET RESEARCH: "Britannia Industries' net profit jumps to Rs.878.50 million against Rs.530.20 million in the corresponding quarter ending of previous year, an increase of 65.69 percent. Revenue for the quarter rose 13.66 percent to Rs.15024.20 million from Rs.13218.90 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.7.35 a share during the quarter, registering 65.55 percent increase over previous year period. Profit before interest, depreciation and tax is Rs. 1529.70 million as against Rs.905.90 million in the corresponding period of the previous year." KOLKATA, AUG 12: Britannia Industries on Monday reported a standalone net profit of over Rs 86 crore for the quarter ending June 2013; a 99 per cent increase on the Rs 44 crore it reported in the corresponding quarter last fiscal. Turnover during the period stood at Rs 1,416 crore. Amongst the expenses, the company reported a substantial increase in advertisement costs. Costs rose to Rs 127 crore this quarter as compared to Rs 99 crore in June 2012. Sequentially, however (between March 2013 and June 2013), sales and net profit both witnessed a marginal drop. According to Guarang Kakkad, Vice-President-Institutional Research, Religare Capital Markets Ltd, the increase in net profit was aided by “lower interest expense and higher other income”. It was partially offset by higher tax rate, he added. On a consolidated basis, Britannia, during the period, reported a 93 per cent increase in net to nearly Rs 90 crore and a 14 per cent increase in turnover to Rs 1,540 crore. Operating margins improved to 7.7 per cent in comparison to the 4.5 per cent it reported during the corresponding period last fiscal. "The expansion in margin is consequent to an improvement in product mix and higher price realization coupled with an emphasis on cost management,” Vinita Bali, MD, Britannia was quoted as saying in a company release. The Wadia Group-controlled Britannia Industries expects its biscuit manufacturing unit in Gujarat to be on stream in another two to three months. “The Gujarat unit is expected to be on stream next quarter. It will entail an investment commensurate to similar plants, which is in the range of Rs 40-50 crore,” said Britannia Industries Managing Director Vinita Bali, addressing reporters here. The company, she added, would focus on improving its product portfolio in the bakery and dairy divisions. Biscuits, cakes, rusk and bread make up the bakery division. Dairy includes milk, butter, yogurt and allied products. Britannia, according to Bali, was also planning to sell its unit in Chennai, which has been shut since 2008-09. Plans are also afoot to move from its “luxurious” corporate office, Britannia Gardens, in Bangalore, to a new one within the city. The shift is likely to take place early next year. The Britannia stock closed trading at Rs 732, an increase of almost 5.43 per cent, at the BSE. SEGMENTATION:
  • 21. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 20 As the companies cannot go to all sectors and to all customers with different needs and demands of customers. So it is very important for any company to identify various market segments. The segmentation of BRITANNIA is analyzed as follows:- Demographic segmentation:- Looking at the age, gender, family size, income and occupation of various people, Britannia also have segmented there market like:- Depending on Age: - Britannia Fruit Rolls is designed basically for the children. Good day, Cream Creaker, Marry are basically for the more matured people. Little Hearts are designed for the younger generation people. Income: - Good Day, Milk Cream is basically for the people little bit of higher income level. Britannia Marie, Suji tost are basically designed for them who belongs to a little lower level income group. Different products with packages of Rs. 5, Rs. 10 are also made keeping the income status of people. Behavioral segmentation:- Some people’s behavior changes with their psychology and mood also. Keeping this into consideration Britannia also has segmented this market. Benefits: - At tea time we require also some snacks. Keeping this into consideration Britannia has specified products like Cream Creaker, Suji tost. User status: - People in dating or love often prefers for some time pass with some food. Britannia’s Salted Time Pass and Little Hearts are the perfect solution for that. The Little Hearts biscuit are extremely dedicated for the people in love as these biscuits are very little in size, shape like heart and perfectly red colour. Usage rate: - Britannia has also segmented their market depending on the customer usage rate. Marie Gold is a product which is for High Usage Rate Customers. Niche segmentation:- It includes the further segmentation of the segments of the original market. Britannia Slice Cakes and Britannia Good Day are designed for the people who actually also wants some food characteristics in a biscuit. Different Cream Biscuits are also made for the people who love to have biscuit with cream. Target markets Being a very much consumer market product Britannia have different target markets with different products. This can be discussed with different products and markets. Being a very familiar consumer product they basically use a full market coverage strategy with different products. Britannia tiger: - with a lower price and smaller packs of this product Britannia basically targets for people with relatively lower income groupwho are connected about the product quality as well as with the pricing of the product. With this product Britannia also captured a huge proportion of rural market of India. Britannia 50-50:- pricing with a bit higher than Tiger it actually uses the concept of namkeen biscuit or in other words snacks. People who like to have snacks with tea or anything else Britannia also targets them with this product. Britannia Marie gold: - with a bigger packaging size it targets for the families having more number of people. As the requirement is high so they designed these packets with larger number of biscuits. Also gives a family like moderate taste. Britannia Good Day: - actually uses the concept of butter biscuits. It actually targets for the people with a bit higher income group. Who wishes to buy biscuits not always for food requirement but for bit of luxuriousness.
  • 22. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 21 Treat Fruit Rollz: - it actually targets the children and uses a concept of celebration. As at the time of celebrations among the children biscuit is an important issue. It targets the occasion as well as the minor group of their potential market. For Britannia Brands a three pronged strategy was followed through ▫ Improved distribution in high growth markets of USA, Canada, Australia, New Zealand and Singapore, ▫ Launch of new products like Rusk, Nutrichoice 5 Grain, Nutrichoice Digestive, and ▫ Opening up of new geographies: Taiwan, Fiji, Nigeria, Botswana & Ghana CUSTOMER LOYALITY: Britannia is one of this country's leading financial services organisations with a strong competitive advantage from its 'Mutual' organisational structure which provides an unbeatable link with its customers – because its owners (members) are its customers. Today modern organisations must pay close attention to the 3 C‟s which are the basic facts of life of business success – namely customers, competition and costs. Customers provide organisations with their basic needs through the sales which the organisation is able to make to contented customers. Competitors provide organisations with a spur to efficiency. No company will be successful unless it can stay ahead of its competitors. Costs are the driving force that determine profitability. Successful companies must continually seek new ways of keeping costs down whilst at the same time giving better value to customers. The age of the consumer When a firm produces goods or services it must make sure that it genuinely meets consumer needs. A business is unlikely to be successful if it tries to deceive customers through advertising and publicity but at the same time failing to meet their needs. The financial services industry has changed out of all recognition in the 1990s. In the past the Industry had been characterised by specialisation: Building Societies – focused on managing customers‟ savings and lending money to house buyers in the form of mortgages Insurance companies – focused on a range of household and business insurances and the provision of life assurance and pensions. High Street banks – focused on managing customers‟ accounts, money transmission services and a range of loan and overdraft facilities to private and business customers. All this has changed as the government has encouraged active competition in the financial services market. Increasingly, organisations have begun to offer a range of services. Today a modern financial services organisation acts as a “one-stop shop” providing a range of benefits to customers: 1. Looking after their savings and rewarding them with interest 2. Providing mortgages and long term loans as well as short term personal loans and overdrafts 3. Providing bank accounts with cheque books, ATMs and other money transmission products 4. Providing customers with a range of insurance and assurance covers and pensions 5. Servicing customers‟ requirements for foreign currency and overseas transactions, etc.
  • 23. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 22 6. Providing a range of business services 7. Buying shares and unit trusts for customers 8. Many organisations, which are household names, now offer all or some of this range of services and compete strongly with each other. These include Britannia Building Society, National Westminster Bank and the Prudential. 9. As competition has spread within this sector, so too has the sophistication with which customers‟ needs are met. This development has been helped particularly by new technologies such as the on-line database. Today, customers receive a 24 hour service from financial service institutions through automated services which are to be found on the wall outside financial services organisations and through telephone links. OWN BRANDS/NATIONAL BRANDS: PRODUCT BRANDS - BRITANNIA INDUSTRIES LTD. BRITANNIA BRANDS
  • 24. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 23 Britannia in the Middle-East In March 2007, Britannia Industries Limited formed a Joint Venture with the Khimji Ramdas Group, one of the largest and the most respected business conglomerates in the Middle East. Britannia and its Associates have acquired a significant stake in Dubai based Strategic Food International Co. LLC and Oman based Al Sallan Food Industries Co SAOG. The two companies are key regional players in the biscuits, wafers and cookies segment in the GCC markets and export their products across the world. Strategic Food International Co. LLC (SFIC) is one of the largest biscuit and wafer manufacturing companies in the Middle East. An ISO and HACCP certified company, SFIC is also a proud winner of the Dubai Quality Appreciation Certificate. It offers a wide spectrum of products under the brand Nutro, which is a leading biscuit brand in the Middle East. Al Sallan Food Industries Co is one of the foremost companies for the production of cookies, rolls and chocolates. The products are well known under the brand name of Baker's Pride.
  • 25. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 24 Baby products:- Nestle Nan Pro Stage 2, 400 gm. Pouch Rs. 368.00 Nestlé is the world's leading nutrition, health and wellness company. Their mission of "Good Food, Good Life" is to provide consumers with the best tasting and the most nutritious choices in a wide range of food and beverage categories and eating occasions, from morning to night. Nestle also brings to you products for your baby – Nestle Nan Pro Stage 2! If you are a new mother or are expecting then you want the best for your baby. You browse through online websites and scour the shops trying to find the right thing for your baby, be it clothes, toiletries, toys or most importantly food. Nestle Nan Pro 2 is a specific follow-up formula which contains BL Bifidus, a blend of naturally active bacteria, which help to promote healthy intestinal micro flora, and OPTI PRO2, an optimized protein profile to ensure the right amount of protein for baby's development. Moreover, it also contains DHA and ARA, two fatty acids found in breast milk that support brain and vision development. Give your bundle of joy the care and good health he/she deserves. Buy Nestle Nan Pro 2 online now! Nestle Cerelac Multi Grain 5 Fruits Stage 4, 300 GM Pouch Rs. 180.00 Ingredients: 20+ Important Nutrients. Contains Fruits, Milk & Multi Grains. Energy, Protein, Calcium, Vit D. Iron, Zinc, Vit A, Vit C. Ingredients On Preparation: Water, Milk Solids, Wheat flour, Sucrose, Malted barley, Orange juice concentrate, Corn oil, Apple, Corn, Rice Cherry Crunchies, Strawberry Crunchies, Apricot Crunchies, Vitamins and Minerals. Baking item:- Pillsbury Choco Cake Mix, 300 gm. Carton Rs. 125.00 Details of Pillsbury Choco Cake Mix Ingredients: Sugar, water flour, cocoa solids (6.5%), edible vegetable oil, dextrose, raising agents (E 500(ii), E 541(i), E 341(i)), permitted emulsifiers & stabilizers (E475, E471, E412, E466), modified starch, salt, nature-identical flavouring substances (vanilla)
  • 26. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 25 Betty Crocker Devil's Food Cake Mix, 500 gm. Carton Rs. 210.00 Ingredients: Sugar, wheat flour, cocoa solids (8%), edible vegetable oil, dextrose, raising agents: E500 (ii), E341 (i), E341 (ii), starch, milk solids, salt, emulsifiers and stabilizers: E475, E471, E412; modified starch, artificial flavouring substances: vanilla USE OF MULTIPLE CHANNELS Distributor Station The challenge of online sales is logistics and fulfillment; processing Internet orders efficiently is crucial for achieving the savings available with ecommerce. If your Web storefront isn't completely integrated with your business system software, it may actually add costs by creating more work for your employees. Integration is also important in providing the additional functionality required for handling business-to- business sales over the Internet. ECi’s Distributor Station® Web storefront is completely integrated with our Maytech™ business system software. Critical transaction data, including pricing, account information and order history are stored and managed in Maytech, eliminating the need to re-key account information or upload separate contracts to your Web storefront. Likewise, incoming orders are automatically downloaded for processing. Features With Distributor Station and Maytech, your Web storefront is linked to every area of your operation. This level of integration makes it easy to provide online accounts with their unique customer pricing, reflecting their specific discounts or contracts. Additionally, Distributor Station provides your customers: Multi-level purchase authorizations Online access to order history Multiple order acknowledgement alternatives Much more! System Requirements Hardware For simplicity and security, Distributor Station is hosted and maintained by ECi in a state-of-the-art collocation facility. Hardware management and routine site maintenance, including daily backups, are included as part of the hosting service. The only hardware you will need is the appropriate type of router or modem for your Internet connection. Security Distributor Station Web storefronts are hosted in a secured, restricted-access facility. Data security features include a dedicated firewall appliance, redundant router infrastructure, and virus protection for all servers. Your Distributor Station site will include the VeriSign logo with navigation bar links for verification of the certificate. For transaction security, Distributor Station pages display only partial account numbers for credit card purchases. While Distributor Station is fully integrated with Maytech, only specific transaction information is transmitted between the two systems. Your Maytech system remains secure; customers cannot access it through Distributor Station. Internet Service
  • 27. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 26 Distributor Station requires a dedicated Internet connection at your site and a static IP address for connection to your Maytech system. You will need to work with an Internet service provider to set up these services. You will also need communication hardware (DSL modem, router, etc.) appropriate for your type of Internet connection. Distributor Station includes e-mail links to allow customer feedback. To implement this feature, you must have at least one e-mail account. EXCELLENT DISTRIBUTION CHANNEL Britannia products are sold in over 2 million outlets, reaching millions of consumers who buy approximately 2.4 billion packs each year. A small army keeps Britannia going - over 100 stock-keeping units, 3,000 employees, over 1,500 authorized whole sellers, 53 depots and 46 factories. Established – 1892 - initial investment – Britannia Rs 295 Biscuit Company 1910 – Mechanized operations 1975 – Took over the distribution from Parry’s 1978 – Indian Shareholding crossed 60% 1983 - Revenues crossed 100 crores 1993 – Sales crossed 1, 00,000 tonnes of biscuits 1997 - Launch of Tiger Biscuits New corporate identity -“Eat Healthy, Think Better “ Enters Dairy market 1999 - “Britannia Khao, World cup Jao “ Profit up by 37%, sales up 80% 2002 – JV with Fonterra - World’s second largest Dairy Company, Britannia New Zealand’s Foods Pvt Ltd. Is born, 2004 – Volumes cross 3, 00,000 tonnes of biscuits 2005 – Rebirth of Tiger – “Swasth Khao Tan Man Jao “ The marketing channels play an important role in the movement of goods from the company to the end-user. Marketing Channels are sets of interdependent organizations involved in the process of marketing a product or service available for use or consumption. Channels of distribution are the means employed by manufacturers and sellers to get their products to the market and into the hands of users. Channels are management tools used to move goods from production to consumption. They are means by which title to goods is transferredfrom sellers to buyers. The process of transferring title is not sosimple, especially in the present day markets that are characterized by heterogeneity on both the supply and demand sides. There are a wide variety of goods produced for sale, or the other side there are highly varied and complex desires of consumers. According to A.W.Shaw “distribution is the application of motion to the materials as they move from times, places, forms and conditions where they have no value to the times, places, forms and conditions where they have value”. ESSENTIAL FUNCTIONS OF DISTRIBUTION CHANNELS Transfer of title to the goods involved. Physical movement from the point of production to the point of consumption. Storage function Communication of information concerning availability,
  • 28. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 27 characteristic and price of the goods in transit, inventory and on purchase. BISCUIT INDUSTRY IN INDIA - AN OVERVIEW Baking practices were well known to Indian cuisine for thousands of years, but the humble biscuit became a familiar and common place item of diet only during the 20th century. Biscuit is a hygienically packaged nutritious snack food available at very competitive prices, volumes and different tastes. According to the NCAER Study, biscuit is predominantly consumed by people from the lower strata of society, particularly children in both rural and urban areas. Limited over the last century have been responsible for this remarkable dietary acculturation. The entire biscuits‟ market is estimated to be 1.1 million tonnes per annum, and valued at over Rs. 50 billion. The biscuits segment enjoys one of the most developed markets for any item of mass consumption, covering over 90 per cent of the overall potential market. This implies that over 900 million Indians buy and eat biscuits, with varying frequency in any year. Biscuit industry in India in the organized sector produces around 60% of the total production, the balance 40% being contributed by the unorganized bakeries. The industry consists of two large scale manufacturers,around 50 medium scale brands and small scale units ranging up to 2500 units in the country, as at 2000-01. Britanniabanksonincreaseddistributiontofuelsaleofdairyproducts It’s important for Britannia to sell more of its dairy products because volume growth in biscuits is slowing. Bangalore: Britannia Industries Ltdis expanding distribution of products such as curd and cheese in supermarkets and other modern trade outlets and launching new products as it looks to maintain the high growth of its non-biscuit business. The maker of Tiger and Good Day biscuits expects sales of its non-biscuit businesses to grow rapidly to Rs.1, 500 crore in the year ended 31 March, managing director Vinita Bali said. The company reports its full-year results later this month. “Our target is to continue the high double digit growth rates that we‟ve seen in the non-biscuit businesses. We‟re looking at innovations in our current products and launching new products in dairy. And we have to increase the availability of these products,” Bali said in an interview. It‟s important for Britannia to sell more of its dairy products because volume growth in biscuits is slowing as the high cost of inputs such as sugar have forced biscuit-makers, including Britannia, to raise prices over the past few years. The Wadia Group Company is also facing increased competition in biscuits from Parle Products Ltdand ITC Foods. Unlike biscuits, which companies say are available across 85-90% of urban India and 60-70% of the hinterland, dairy products such as branded milk and cheese aren‟t that widely available. The company needs to boost demand in urban areas and persuade consumers to opt for its products rather than making these at home, said Ashok Namboodiriwho heads Britannia‟s dairy business. “There are hardly any dairy products available in rural areas. It (availability of branded dairy products) is focused in urban areas because there‟s still a lot of room for growth. Modern trade is the priority in distribution over the next two to three years given that our target customer is likely to shop there. The idea is to first saturate that channel,” Namboodiri said. Bali pointed out that not every biscuit outlet is a dairy outlet. “For example, you can‟t sell curd in an outlet which doesn‟t have a fridge. Curd is available in just six metros and cheese in the top 30 cities,” she said.
  • 29. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 28 However, the company enjoys benefits of scale as it uses the same distributor to sell all its products to retailers. Apart from cheese and curd, Britannia‟s non-biscuit products, which will account for roughly 20-25% of its business, include ready-to-drink beverages such as flavored milk, ghee, bread, cake and rusk. A majority of the sales of non-biscuit products come from cheese, curd and ready-to-drink beverages and these three categories will continue to drive growth, Namboodiri said. Britannia‟s non-biscuit products are gaining importance for the company partly because margins are higher than in biscuits, said Bhaveshkumar Jain, analyst at Sushil Financial Services Pvt Ltd. “The non-biscuit business is going to be a major driver of growth for Britannia. I expect the biscuit business to grow 10-11% over the next years whereas the non-biscuit side will grow at 20-25%. Other players like Nestle and DANONE have also sounded very positive about dairy products,” Jain said. STAFFING/RECRUITMENT What makes Britannia:- If u think Britannians are extraordinary individuals who are passionate about everything they do...Createinspiration through everything they do and succeed in everything they do… you’re probably right. Britannians are handpicked for a singular purpose to perpetually ensure market leadership and generate exemplary performance in every function. Britannians exhibit the following leadership behaviors. Integrity Team orientation People development Learning orientation Customer orientation Quality orientation Drive your results Entrepreneurial spirit System and process orientation Communication If you feel stack up well in terms of all these behaviors don’t waste time… join us! Recruitment- Not many companies can boast a 100-year distinguished history, and fewer still can be linked with stakeholders and markets across continents. This superlative trajectory notwithstanding, at Britannia it's always been recognized that none of it would have been possible without the people. Over the years, Britannia has been associated with many brilliant careers, and evidence of the success of its strategic-yet- friendly people policies is to be seen in the current crop of management and staff and indeed the performance of the company itself. Part of the allure of working at Britannia emanates from our strong belief in nurturing people so they can get
  • 30. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 29 in their full stride. The other aspects that make Britannia a coveted destination include proffered opportunities for growth, and that 'idea leadership' and 'accountability' are encouraged every step of the way. Today, with the extraordinarily dynamic and adaptive people we attract, Britannia is fully geared for the new- age business paradigm. If you feel you are in sync with the Britannia vision, do call us to explore opportunities in your sphere of work. Nurturing Talent An innovative company like Britannia is always on the lookout for innovative, young minds. The Management reorganizational culture provides a perfect blend of fun and learning that helps in the overall development of talented individuals recruited into the system. Today, with a huge variety of professional institutions spread across the country, there is a broader canvas to choose from. The main sources of recruitment of Management Trainees are: Business Schools (MBA) Engineering Institutes Food Technology Institutes ICAI/ICWAI/ICSI/ICFAI and other such institutes offering professional courses An alternative route is for candidates to apply directly to Britannia or through a recruitment consultant. The distinguishing factor between MTs and other lateral hires would be in terms of their experience and qualifications. In this case, however, candidates may or may not have prior experience. For experienced candidates, 1 year or less would be the maximum cap to be eligible for the Management Training Scheme. Campus - Campus recruitment has two stages, viz. Summer Trainee Recruitment and Management Trainee Recruitment. Summer Training takes place for a period of two months where students from Business Schools and Functional Institutes (Engineering/Food Technology/Finance) work on projects with Britannia in the following functional areas - Marketing; Sales and Distribution; Operations and Supply Chain; Human Resource Management; Finance and Quality Assurance. Summer Trainees at the end of their training tenure are taken through an evaluation process to assess placement within the company as Management Trainees. This happens through a Pre-Placement Interview by a panel that assess the candidate on his/her project and his/her potential to fit into the organization. Management Training - Management Trainees are recruited on the basis of actual vacancies in the system. They are recruited either through Pre-placement offers made to exceptional Summer Trainees or through direct Campus Recruitment. MTs join the covenant grade as Management Trainee - (function), and are absorbed into the following functions - Sales and Distribution; Operations and Supply Chain; Human Resources; Finance and Quality Assurance. The Marketing function has so far been insulated from the Management Training Route as entry level marketing positions require knowledge of Sales or prior knowledge of Marketing (lateral route). The Program - Once MTs are on-board, they are taken through a series of carefully designed Training Modules that encompass almost all functions of the business. The Training Modules are interspersed with live projects in different functions to test their knowledge and problem-solving abilities. Ideally, any Management Trainee would need to complete at least 2 live projects related to his/her stream of interest and 1 live project in a related function or a function of choice. At the end of the training period, all MTs are assessed on the basis of their learning and project performances by a cross-functional panel consisting of Functional Heads. On successful completion of their Training Program,
  • 31. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 30 MTs are confirmed as Managers in their respective functions. The total tenure of Management Training is 18 months for a Technical Trainee (Engineer/Food Technologist) and 12 months for all other trainees. SALES PROMOTION Economic times = Britannia Industries net up 23% at Rs 53 crore Sarah Jacob, ET Bureau May 30, 2012, 08.52PM IST BANGALORE: Bakery products company Britannia Industriesreported 22.6% increased net profit at Rs 53.03 crore in the quarter ended March 31 2012 compared to Rs 43.25 crore in the year-ago period. The board of directors of the company recommended dividend of Rs 8.5 per share of face value Rs 2 on Monday. The Hindu business line Britannia Industries today reported nearly two-fold rise consolidated net profit to Rs 89.58 crore for the first quarter ended June 30, 2013, due to improvement in product mix and higher price realization. *Stocks: Top Gainers/Top Losers The company had posted a consolidated net profit of Rs 46.50 crore for the same period previous fiscal. *Search: India Inc A, B, C Company's consolidated income increased to Rs 1,539.62 crore in the April-June quarter, from Rs 1,348.15 crore during the same period last year, Britannia Industries said in a filing to the BSE. "The expansion in margin is consequent to an improvement in product mix and higher price realisation coupled with an emphasis on cost management -- the growth we saw in the second half of last year, continued," Britannia Industries Managing Director Vinita Bali said. Britannia Industries shares were trading at Rs 747 on BSE, up 7.59 per cent from its previous close. ADVERTISEMENTS Britannia launches Vita Marie Gold; targets "today's women" with new campaign Creative for the brand re-launched as 'Health Plus' Marie, is handled by Lowe Lintas. To gain a higher share of mind and gain consumers in new geographies, Vita Marie Gold, a brand re- launched as the “Health Plus” Marie is coming out with a new multimedia campaign. Lowe Lintas has
  • 32. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 31 worked on the multimedia campaign that spans across television, point of purchase - both traditional and modern trade, as well as print. The creative depicts a busy, young, working woman on a local, railway station grabbing a cup of chai to have it with her Vita Marie when suddenly the train arrives and she has no choice but to board it. Through her on board struggle to have the tea and biscuit, the woman depicts the struggle of all active women who struggle to make the most out of their life and also tea breaks. On the thought behind this re-launch campaign, Anu Narasimhan, Category Director - Health and Wellness, Britannia Industries, said, "The insight that we worked on for the campaign was that: Today‟s woman has so many aspirations she‟s out to fulfill, so many activities she packs her day with, so much of life she‟s eager to enjoy, that she‟s left with very little time to take care of body‟s need for extra nourishment. We chose the „working woman' as our protagonist as she best personified the 'busy and time-crunched life' of today's woman, who wants more out of every moment, even her tea breaks. We propositioned Vita Marie Gold as a 'Fully Loaded Marie for a Fully Loaded Life', her intimate health accomplice rather than just another Marie." Narasimhan informed that the communication across other media has been adapted into an interesting caricature that depicts the enjoyment of the consumer‟s life and why Vita Marie Gold is her health accomplice. "What we are essentially trying to depict is that the modern day woman doesn't want to give up any pursuit - and therefore brands have to find meaning in her life. Our brand fits in as her accomplice to vitality," she added. The campaign, which began on December 8, 2010 will run its course till January 15, 2011. The brand will be using Hindi and Regional GECs along with Lifestyle and Movie channels. Britannia unveils new campaign to push Bourbon Britannia Industries has launched its latest campaign, which is dedicated to its chocolate biscuit range, Bourbon. Conceptualized by Britannia's AoR McCann Erickson, the campaign aims to focus on the sensual emotions that chocolate as a flavor evokes in a person. Britannia Industries has launched its latest campaign, which is dedicated to its chocolate biscuit range, Bourbon. Conceptualized by Britannia's AoR McCann Erickson, the campaign aims to focus on the sensual emotions that chocolate as a flavor evokes in a person. Commenting about the new campaign, Shalini Degan, category director, delight and lifestyle, Britannia Industries said, "We wanted to reposition bourbon as a 'youth brand and to create an affinity for the target audience that makes Britannia Bourbon one of their their preferred brands. Currently, it is a product they like." Speaking about the idea behind the campaign and the communication objective, Anil Thomas, creative head, McCann Erickson said, “We decided to build upon the idea that Britannia Bourbon was a 'deceptively delicious' biscuit.” A girl is visiting her boyfriend to watch a movie at his house, when she realizes that his friends are over to watch a match instead. Disappointed, she begins eating a
  • 33. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 32 Britannia Bourbon biscuit and suddenly she lets out a moan. Distracted, the boys begin staring at her in astonishment as she lets out more sensual moans. Seeing his friends' sudden interest in his girlfriend, the boyfriend throws out his friends and ends up watching the movie, just like she wanted him to in the first place. When asked if the TVC expects any objections from the consumers because of the sensuality displayed by the girl, Degan says, "The story is witness to our intent. The girl cleverly gets what she wants (wants to watch a movie with boyfriend, the competition was a match on TV and his friends... she drives them away in a way that is very clever). Our consumers find this kind of a cleverness very aspirational, cool and also funny. We are confident the consumers will see the film in totality and not in parts and therefore enjoy the intended humor in the story." Speaking about the consumer insight that the campaign is based on, Thomas says, "Today‟s youth enjoy situations where they effortlessly maneuver themselves out of tricky situations; getting away with it in broad daylight. We decided to base the campaign on this thought." The media exposure for the campaign includes TV. The creative team working behind the campaign includes Prasoon Joshi, Thomas and Ratish Subramanian. The film has been directed by Anurag Basu and produced by Red Ice Productions. Britannia awards media duties to Madison Media Britannia has handed over its media duties to Madison Media after a fiercely fought, two- stage, multi-way pitch that saw participation from Madison Media, OMD, Mudra Max, Lodestar, MPG and the incumbent, Maxus. Maxus held the account for the last five years. The account size is estimated to be Rs 75 crore. The pitch was led by Punitha Arum gam – group CEO, Madison Media. The account will be handled by Madison Media Infinity-II out of Bangalore. Britannia has handed over its media duties to Madison Media after a fiercely fought, two-stage, multi- way pitch that saw participation from Madison Media, OMD, Mudra Max, Lodestar, MPG and the incumbent, Maxus. Maxus held the account for the last five years. The account size is estimated to be Rs 75 crore. The pitch was led by Punitha Arumugam – group CEO, Madison Media. The account will be handled by Madison Media Infinity-II out of Bangalore. “We are delighted to have the country‟s largest biscuit major and a marquee name in India‟s corporate world as our client,” said Sam Balsara, chairman and MD, Madison World. “Britannia‟s decision once again confirms that we have on the ground what it takes to be the media agency of choice of large advertisers.” Britannia set to turn 90, launches new thematic campaign As it prepares to celebrate its 90th anniversary, Britannia has unveiled a new brand campaign that celebrates the Brittania way of life. The campaign has been conceptualized by McCann Erickson and involves a set of three commercials of 45 seconds each, each portraying a montage of situations which integrates Brittania products across categories to showcase how the brand is a part of consumers' daily lives. As it prepares to celebrate its 90th anniversary, Britannia has unveiled a new brand campaign that celebrates the Brittania way of life. The campaign has been conceptualized by McCann Erickson and involves a set of three commercials of 45 seconds each, each portraying a montage of situations which integrates Brittania products across categories to showcase how the brand is a part of consumers' daily lives.
  • 34. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 33 Speaking about the brief provided by Britannia, Prasoon Joshi, executive chairman and regional executive creative director, Asia Pacific, McCann Erickson said, "The increasing array of competitors in the core segment of Britannia business today, that is 'Biscuits', are driving 'product sameness' and competing aggressively on price to make it the single most important purchase factor. There is increasingly very little differentiation in the category. The company wanted to leverage its mother brand 'Britannia' much more." Joshi added, "The campaign is a reflection of Britannia's philosophy and mission – to add a little liveliness to our lives. It focuses on life's moments that become a little more exciting or indulgent or enjoyable, thanks to the presence of Britannia." "While on the surface the campaign promises to be a visual delight, it also carries a deeper message that re-affirms Britannia's promise to its consumers – that Britannia will continue working towards adding more and more moments of joy in every life they touch," Joshi added. Each of the commercials are a series of situations with music and a voiceover in the background. At the start of the first TVC, two boys are bickering over a piece of cake, when one of them feeds the piece to their dog, just to annoy the other boy. In the next scene set in a college laboratory, a boy lets a girl know about his feelings for her using Britannia Little Hearts. In the last situation, a woman is sitting with two young girls, and eats the biscuit just the way the girls eat it – by licking off the cream from the centre first. The commercial ends with the voiceover signing off with the brand's new baseline, Zindagi mein life. The next two commercials too, have similar situations, each highlighting the fact that Britannia brings people closer and helps them bond. Speaking about the need for a thematic campaign specifically at this point in time, Neeraj Chandra, vice president, sales, marketing and innovation, Britannia, explains "A lot has changed about India in these years. The mindset of Indians has undergone a metamorphosis and so have their habits. In this changing context, Britannia has silently played a critical role in the lives of millions of Indians. Be it indulgence in a mouthwatering 'Treat' for children or providing the energy to be a 'Tiger' or the perfect way to start a 'Good Day' or making a 'Nutri-Choice' in food – Britannia has been India's preferred choice." The media mix for the campaign includes TV, print, outdoor and radio. PRICING STRATIEGIES FMCG major Britannia Industries Ltd today said it is in the process of reviewing the pricing structure of its products in view of the sharp increase in input costs. "Price is a dynamic variable and we are continuously monitoring the situation," Britannia Industries MD and CEO Vinita Bali said when asked whether the company was planning to increase product prices. Bali said the company plans to invest Rs 200 crore across the country in the current fiscal. She said the company plans to enter the breakfast segment by offering a mixed pallete ranging from 'upma' to porridge. The company was in the process of setting up two factories in Bihar and Orissa. Price of Britannia The price strategy of Britannia are:- Market-Penetration Pricing for the products like Tiger Product –Quality Leadership for products like Good Day and Treat Special Event Pricing in festive season.
  • 35. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 34 Price Range Britannia good day coconut butter biscuit= 180gmRs 35; Good day=90gmRs 12; Good day Chaco-nut cookies=90gmRs 15; Good day= 180gmRs 23 Marie gold=337gmRs 2 Milk bikis milk cream =89 gmRs 15 Milk bikisMilk bikis=128 gm85 gmRs 10Rs 7 Marie gold =171 gmRs 13 Marie gold =69 gmRs 5 Yummy choco cakes =145 gmRs 22 Nutri choice hi fibre =250 gmRs 38 Treat choco=67 gmRs 10; Pure magic chocolatecreme=150 gmRs 20 Milk bikis=128 gmRs 10 Milk bikis =178 gmRs 25 Marie gold=69gmRs 5 50-50=165 gmRs 16 50-50Maska Chaska=66 gm Rs 10 50-50=113 gmRs 10 50-50=65 gmRs 7 Nice time=133 gmRs 14 E – COMMERCE ECi Britannia™ E-commerce Put Your Business on the Web
  • 36. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 35 Ecommerce is key to leveling the playing field with superstores and other competitors. A flexible, easy-to-use Web storefront lowers your costs on every order and helps you lock in customers. That’s why Britannia E-commerce is an ideal solution. It’s a cost-effective Web storefront that is fully integrated with the Britannia system. Britannia E-commerce offers a quick and easy interface and powerful search tools for a competitive Web presence. And full integration means customer information and pricing come directly from your Britannia system, eliminating the additional labor associated with some Web storefronts. Why Britannia E-commerce? Customizable Web storefront Custom pricing for each user Custom coupons Advanced search capabilities No transaction fees/setup charges Fully integrated with Britannia — no re-keying orders User-driven lists Performance reporting and analysis Simplifies office supply procurement Machine matching Punchout integration to customer procurement systems available. CRM strategies A growing relationship with customer and customer retention: Now a days a good relation with the customer is very important for organization. Sale is totally depending on the relation with the customers. Customers’ retention is also a major aspect for growing business. It means keep the old customers and try to make new customer. Britannia’s customer relationship management is very strong which is one of the major causes of selling of their product continuously.
  • 37. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 36 Porters five force model analysis Threat of New Entrants - Medium • Hard for a new entrant due to high product differentiation & a strong distribution n/w • Extremely price sensitive industry & therefore not much flexibility to increase prices • Depends on the agricultural sector for wheat • Low growth rate of 13% • VAT of 12.5% and an excise duty of 8% Rivalry among existing firms - High • 3 main players- Britannia, Parle, and ITC Ltd. (PriyaGold and Bakeman – regional) • Britannia & Parle hold almost equal market share, ITC ltd holds a lower market share • Hence, they keep a close watch on the changing strategies of each other Bargaining power of suppliers - High Wheat is the main ingredient required for baking biscuits. During inflation they purchase wheat at the price quoted by the farmers as wheat does not have a close substitute. Threat of Substitute Products – Medium • The substitutes of biscuits are namkeens, chips, potato wafers etc. but biscuits have become a part of people‟s everyday life. • Biscuits are a low priced commodity, hence a small increase in price would be acceptable in urban areas but may cause a shift to substitutes in rural areas Bargaining power of buyers – HighConsumers have option of shifting brands according to their liking of price, quality and taste. Hence not much flexibility to biscuit manufacturers to increase price or compromise of quality. Also, consumers are going for bulk purchases at cheaper rates from bakery stores. Company Analysis • Company‟s sales rises from Rs. 31.1 Million to Rs. 34 Million • Profit Before Tax reduces from Rs. 2.3 Million to Rs. 1.2 Million • Profit available for appropriation reduced from Rs. 2.4 Million to Rs. 2.2 Million • Sources of fund included shareholder‟s fund, loan fund and deferred tax liability reduces from Rs. 8,596 Millions to Rs. 8,258 Millions • Application of fund included fixed assests, investment, liabilities & provisions and miscellaneous expenditure reduced from Rs. 8,596,456,000 to Rs. 8,258,690,000 Porter‟s Five Forces Model by 0726335 The analysis of Cosmetic Industry has come out with Poter‟s five forces model to analyze the level of rivalry in this industry. In the Porter‟s Five Forces Model the rivalry which is in the middle is most powerful of the five competitive forces. Rivalry among competing firms (High) There are a large number of competitors in this industry, and all competitors are competing for the same customers. Thus Carlina have to compete against its direct competitors that sell similar products. The large number of direct competitors in the industry causes a high degree of rivalry. Competitors are also selling similar products, which is cosmetic product. Due to having so many options, customer is able to switch between brands easily. The industry is in its maturity stage causing the market growth to be static. Thus all companies are striving to maintain its market share in the industry against their competitors.
  • 38. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 37 Barriers to enter for new competitors (Moderate) The barriers to enter for new competitors are at a moderate, especially during the maturity stage of the industry‟s life cycle. Majority of firms that already existed in the industry have developed economies of scale, thus providing a cost advantage to them over the new entrants. If new companies try to enter into the market, it will face problems especially to cover for the expenditures, as they have not established good economies of scale. The new entrants will be forced to reduce the price of products in order to compete, thus it is difficult to survive at the beginning stage. Potential development of substitute products (High) In the era of globalization environment, there is less time being and cost to spend on making one things. Moreover there were a lot of foreign and domestic company produce the similar product. Thus, there were many product and choice that available in the market. Plus, the significant change in consumer behavior where they can tested the cosmetic product freely and product element as pack design also become crucial other than quality. Therefore, all of this showed that high potential development of substitute products in this market. Bargaining Power of Suppliers (Moderate) The bargaining power of suppliers is low for Carlina but for the whole industry, bargaining power is moderate. Carlina does not need many suppliers because all of their production was made in house. Thus there is easy to find suppliers in case they have to switch between them to negotiate at the lowest price possible. Bargaining power of buyers (High) The industry provides many substitutes for Carlina products, as there are many available products from competitors that offer at lowest price and good quality than Carlina. Market research show that a sharp contrast in consumer behavior between old and young people: senior identity themselves with concrete fragrance and consistently consume it, youngster demonstrate low product fidelity, and are vulnerable to the effect of advertising campaigns. They have the right to switch between products easily. Thus, buyers have a significant bargaining power against KKD. Threat of New Entrants - Medium • Hard for a new entrant due to high product differentiation & a strong distribution n/w • Extremely price sensitive industry & therefore not much flexibility to increase prices • Depends on the agricultural sector for wheat • Low growth rate of 13% • VAT of 12.5% and an excise duty of 8% Rivalry among existing firms - High • 3 main players- Britannia, Parle, and ITC Ltd. (PriyaGold and Bakeman – regional) • Britannia & Parle hold almost equal market share, ITC ltd holds a lower market share • Hence, they keep a close watch on the changing strategies of each other Bargaining power of suppliers - High Wheat is the main ingredient required for baking biscuits. During inflation they purchase wheat at the price quoted by the farmers as wheat does not have a close substitute.
  • 39. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 38 Threat of Substitute Products – Medium • the substitutes of biscuits are namkeens, chips, potato wafers etc. but biscuits have become a part of people‟s everyday life. • Biscuits are a low priced commodity, hence a small increase in price would be acceptable in urban areas but may cause a shift to substitutes in rural areas bargaining power of buyers - High Consumers have option of shifting brands according to their liking of price, quality and taste. Hence not much flexibility to biscuit manufacturers to increase price or compromise of quality. Also, consumers are going for bulk purchases at cheaper rates from bakery stores. Pricing strategy Market penetration pricing for products like tiger Product quality leadership for products like good day and treat Special event pricing in festive seasons Wholesaler/Buying Group Price Files Loaded in Minutes Automated Contract Management Cost+, Discount for List, and GP-based Pricing GP Protection Algorithms Variable Margin Pricing Unit of Measure Management Inventory Real time wholesale stock check Inventory tracking Multi location inventory management Inventory reports Refund Policy Customer satisfaction Membership/Subscription – All annual memberships are "auto-renewing," meaning that we will bill your credit card each year on the annual anniversary of your subscription, until you cancel. If for any reason you are unhappy with any element of our subscription service, we will investigate every complaint and will endeavour to resolve any issues as quickly as possible. Merchandise – In the event that you receive a package that is incorrect or damaged, we will gladly provide a refund or replacement. Any items should be returned in the same condition as received, unused and in original packaging. You have 7 days from the date you received the merchandise to
  • 40. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 39 return it to us for a refund. Refunds will be made by cheque within 14 days of receipt of returned goods. Should you need to return merchandise, please contact the Britannia Association office for a product return code. Failed transactions Please ensure that your payment card details are kept up to date. If we are unable to process payment from your card, we regret that it will be necessary to suspend your access to the “members only login” until you provide us with details of a valid credit card. MARKETING STRATEGY OF BRITANNIA The 80-year-old biscuit king is reinventing itself. Britannia now wants to become a foods giant, with the newly-added tag of health and nutrition. What's more, with a clever formula of prices and products, it is targeting every segment of the Indian market. Who does not know Britannia Rules! During period of A day before the World Cup Of Cricket 1999 began in England on May 14, 1999, one of Britannia Industries' senior-most marketing managers was spotted at Mumbai's Sahara International Airport-escorting a gaggle of excited children, all of them sporting Britannia caps, Britannia T-shirts, and other assorted Britannia paraphernalia. No, he wasn't test-positioning yet another brand of biscuits on a group of unsuspecting young 'uns in an airport lounge. Those kids were actually some of the 100 mega-winners of the Britannia Khao, World Cup Jao contest, being flown off on charters to Old Blight to watch the World Cup at Britannia's expense. See Cricket. Sleep Cricket. Eat Only Britannia (sic!) so we can say that, this session is more powerful to catch the customer. The marketing strategies for any company are not about a fixed concept. Rather it is full of new challenges every day, and the companies must respond to it very positively. The market process is applicable to more than goods and services. Anything related to market including ideas, events, policies, prices and personalities comes under market strategy. However it is important to emphasize opportunity in the market through market strategy. The following strategies are basically adopted by Britannia in order to capture a good market share. 1. A strong quality of the product and customer satisfaction: General customers are basically concerned about the quality of product rather than the price of the product. In our survey we found that basically people are first looking for the quality. If good quality is there in the product then they are only looking for the price. But if the quality is not satisfactory they even don’t looking about the pricing of the product. In this regard Britannia always maintained much more importance over there product quality. That’s why they are among the very successful brand of today. 2. A growing relationship with customer and customer retention: Now-a- days a good relation with the customer is very important for organization.Sale is totally depending on the relation with the customers. Customer's retention is also a major aspect for growing business. It means keep
  • 41. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 40 the old customer and try to make new customer. Britannia‟s customer relationship management is very strong which is one of the major causes of selling of their product continuously. 3. Focus on competitor’s activity: Every organization should must be careful about it's competitors step, because they can disturb the growing sales process of the organization. Continuous watching over competitor’s strategies and development help Britannia a lot. 4. A growing emphasis on global thinking and local marketing planning: Companies are increasing by pursuing market beyond their borders. When they enter other countries they must follow the tradition of that country and also they make plan for local market that which type of product has more demand and how can it run in the market. 5. A growing emphasis on global thinking and local marketing planning: Companies are increasing by pursuing market beyond their borders. When they enter other countries they must follow the tradition of that country and also they make plan for local market that which type of product has more demand and how can it run in the market. For Britannia different variation in their product depending over various locations and the economic status of the people is being very much helpful for the company. 6. Promotional Strategy Under the market strategy promotional idea is very important. Organization provides some schemes or rebates to retailers or consumers. They make advertisement according to convenient of the people and the feature of the product. Sometimes Britannia comers to market with new offerings and of course with cost benefits to the customers. Giving discounts over bulk purchase also comes under this strategy.
  • 42. SRM ASSIGNMENT 2 NHCE 3rd SEM MBA 41 Thank you! Have a